ER stress, also known as unfolded protein response (UPR) is a critical signaling mechanism that has been implicated in neuron degeneration, cancer, diabetics and other diseases. Recent evidence suggests that UPR is also induced in cardiac myocytes following hemodynamic overload and ischemia/reperfusion insults. Activation of UPR can provide cellular protection against cytoxicity from protein aggregate as in the cases of amyloidosis, or oxidative and ischemic injury. However, prolonged stimulation of UPR can also trigger apoptosis. Therefore, calibrated regulation of UPR may have significant implication in cardiac protection and injury. IRE1 (a or b isoform) is an ER membrane targeted ser/thr protein kinase with specific RNase activity that is critical to UPR as well as ER stress induced JNK activation and cell death, and is essential for normal embryonic development. IRE1 activity is induced during UPR via dimerization and ser/thr trans-phosphorylation. However, the molecular mechanism involved in its dephosphorylation is unknown. Through genome mining, we found a novel Ser/Thr protein phosphatase (PP2Ce) that is highly enriched in brain and heart, and is exclusively targeted on ER membrane and possesses a remarkable selectivity to dephosphorylate IRE1 in vitro and in vivo. Preliminary studies demonstrate that PP2Ce inhibits IRE1 phosphorylation and negatively modulate IRE1 mediated ER stress signaling. This exciting finding leads to our current hypothesis that this novel PP2C isoform is the endogenous IRE1 specific protein phosphatase and has an important role in regulating UPR in heart under pathological conditions. To rigorously test this hypothesis, we propose to accomplish the following three specific aims: Aim 1. we will determine the role of PP2Ce in regulating UPR in cardiomyocytes in culture. Aim 2, we will explore the molecular mechanisms of PP2Ce mediated regulation of IRE1 activity. Aim 3, we will determine the functional significance of PP2Ce mediated regulation in embryonic development in zebrafish. Aim4, we will use cardiac specific and inducible PP2Ce over-expressor and PP2Ce knockout mouse models to determine the impact of PP2Ce activity on cardiac function and ischemia reperfusion injury in intact animals. From these studies, we will establish the functional role and molecular mechanisms of a novel ER stress signaling component heart and shed new insights to the underlying mechanisms of heart failure.